Hong Kong’ Insurance Authority (IA) has reprimanded and fined the insurers formerly known as Metlife Ltd and Metropolitan Life Insurance Company of Hong Kong.
The companies were ordered to pay a penalty of HK$7 million for running afoul seven specified provisions of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615). Both companies were acquired by FWD in 2020 and are now under new management and branding.
The move comes after an investigation by the IA, which found that the companies had violated the ordinance between January 2015 and October 2017.
According to the IA, the companies failed to maintain effective procedures to determine whether their customers (or the beneficial owners of its customers) were politically exposed persons (PEPs) prior to entering into business relationships. They also failed to take reasonable measures to establish the source of funds or source of wealth or obtain senior management approval to continue the business relationships, when customers were eventually identified as PEPs.
The IA said the companies lacked procedures to effectively assess whether a business relationship could lead to a high risk of money laundering or terrorist financing. They also did not conduct an annual review of the documents, data and information of customers who presented a high risk of money laundering or terrorist financing.
The IA also noted the absence of monitoring procedures and other safeguards to mitigate money laundering and terrorist financing risks. The companies have since taken remedial measures to address the deficiencies identified by the regulator.
“The IA takes these failures seriously and wants to send a clear message to the industry that all authorized insurers and licensed insurance intermediaries carrying on long term business should have in place effective anti-money laundering and counter-terrorist financing controls and procedures,” the regulator said. “The insurance industry must be founded on trust and integrity and the establishment of effective systems and controls to combat money laundering and terrorist financing is imperative to reinforce that trust and maintain Hong Kong’s position as an international finance centre.”
